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Housing transactions in Taiwan down in first half of 2014
Central News Agency
2014-07-29 08:47 AM
Taipei, July 29 (CNA) The volume of transactions in the housing markets of Taiwan's major metropolitan areas fell in the first half of the year from a year earlier, with sales in three of the five areas slumping by double digits, a local real estate agent said. New Taipei saw the biggest decline of the five major metropolitan areas that also include Taipei, Tainan, Taichung and Kaohsiung, with transactions falling 17.48 during the January-June period to 31,351 units, the H and B Business Group said Monday, citing official figures. Housing transactions also fell considerably in Taipei, by 16.73 percent in the first half of the year to 16,694 units, and in Tainan, by 12.82 percent to 10,293 units, the statistics showed. Both Taichung and Kaohsiung saw year-on-year declines exceeding 5 percent, the report said. "Transaction volume has been deeply affected by government measures to curb real estate speculation," Jessica Hsu, head researcher at H and B Realty Co., said in a statement. Proposed tax reforms on capital gains from property transactions would deal a further blow to the market and "make it hard for speculators to survive," she argued, warning the government that the measure could drive capital away from the real estate market. Earlier this month, Premier Jiang Yi-huah proposed to change the way Taiwan taxes capital gains on property sales to make the country's tax system more equitable, and he asked the Ministry of Finance to draft a reform plan by the end of 2014. Under the existing system, when a house is sold in Taiwan, a "land value increment tax" is imposed based on the difference between the government-assessed value of the land when it was bought and sold. Because the government-assessed values are mere fractions of the actual market value, and only the value of the property's land (and not the building) is considered, the tax burden is extremely low relative to the actual gains. Gains from the building portion of the property go untaxed unless one reports them as income voluntarily. Consequently, effective tax rates on income from property sales are extremely low. The reform proposed by Jiang would make two major changes: taxes would be assessed on gains from the sale of a property as a whole (rather than on separate "land" and "building" components), and the gains taxed would be the actual amount made by the seller rather than an amount estimated by the government. (By James Lee)
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